Evans v. Diamond, 389 F. Supp. 3d 979

Gregory Diamond designated beneficiaries for his federal Thrift Savings Plan (TSP); during his marriage Betty Diamond was the listed beneficiary. The couple divorced by decree (Nov. 22, 2013) in which Betty waived any interest in Gregory’s retirement accounts.
Gregory died in August 2017 while Betty remained the named TSP beneficiary of record.
Gregory’s children, the estate, and related parties filed suit challenging beneficiary status and asserting the divorce-decree waiver; a separate suit challenged whether Gregory submitted a change-of-beneficiary (TSP-3) form naming the children.
Betty removed the state-court action to federal court and moved to dismiss; the court consolidated the related TSP-defendant case into this docket.
The court addressed Betty’s motion to dismiss primarily on the question of federal preemption under the Federal Employees Retirement System Act (FERSA), assuming for purposes of the motion that Betty was the designated beneficiary.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether state-law divorce decree (waiver) can defeat a named beneficiary under FERSA (preemption)	The Divorce Decree waived Betty’s rights; the estate may enforce that waiver to reclaim proceeds even if TSP must first distribute to the named beneficiary	FERSA preempts state-law attempts to redirect federal retirement proceeds from a duly named beneficiary; Congress intended payment to the named beneficiary	Court: FERSA preempts the state-law claim that would reallocate proceeds from the named beneficiary; dismissal granted on this ground
Whether Kennedy v. DuPont allows post-distribution contract/estate claims against beneficiary	Kennedy suggests post-distribution private-contract claims might be allowed	Kennedy is an ERISA case; ERISA lacks FERSA’s statutory order of precedence, so Kennedy is inapposite	Court: Kennedy does not control; cases interpreting statutes with an order-of-precedence (Wissner, Ridgway, Hillman) preempt suits that effectively negate that priority
Whether the court can order TSP to distribute funds to Betty before resolution of the TSP-Board case	(Plaintiffs) Not directly argued here for pre-distribution order in this case	Betty sought dismissal of estate’s claim but offered no authority to force TSP to pay her before the administrative litigation concludes	Court: No authority presented to require TSP to pay Betty pre-resolution; claim against TSP/FRTIB remains pending

Wissner v. Wissner, 338 U.S. 655 (1950) (federal insurance statute preempted state-law award of proceeds to a different person than the named beneficiary)
Ridgway v. Ridgway, 454 U.S. 46 (1981) (constructive trust on proceeds under SGLIA preempted where it conflicted with statutory beneficiary designation)
Hillman v. Maretta, 569 U.S. 483 (2013) (FEGLIA’s statutory priority for a named beneficiary preempts state-law claims that would divert proceeds)
Kennedy v. Plan Adm'r for DuPont Sav. & Inv. Plan, 555 U.S. 285 (2009) (ERISA plan administrator must pay the beneficiary named in the plan; left open whether post-distribution claims against beneficiaries are permissible)
Dohnalik v. Somner, 467 F.3d 488 (5th Cir. 2006) (statutes like SGLIA/FERSA preempt state divorce decrees that would override beneficiary designations)